As cryptocurrencies continue to gain mainstream traction, the number of scams targeting unsuspecting investors is also on the rise. Scammers are constantly evolving their tactics, and the explosive growth of cryptocurrency has opened the floodgates for new types of fraud. From phishing schemes to fake exchanges, fraudsters are constantly evolving their tactics to exploit both new and experienced users.
Whether you’re just starting your crypto journey or already have a portfolio, staying informed about these risks is critical to keeping your investments safe.
In fact, 2021 was a record-breaking year for crypto-related crime—according to blockchain analytics firm Chainalysis, cybercriminals stole a staggering $14 billion worth of crypto. Fast forward to 2025, and crypto scams have become even more sophisticated, especially in emerging markets like India.
So how can you protect yourself in this digital wild west? Let’s explore the most common scams, how to spot them, and what steps you can take to safeguard your investments.
1. Fake Crypto Exchanges and Apps
Scammers create apps or websites that look identical to legitimate crypto exchanges. These platforms may operate normally for a short while, accepting user deposits and offering fake trading features. But eventually, they vanish—along with your money.
How to spot it:
- The app isn’t available on trusted app stores.
- The website URL is slightly misspelled (e.g., “wazirlx.com” instead of “wazirx.com”).
- No verified company registration or customer support.
2. Ponzi and MLM Schemes
These scams promise high returns for recruiting others. You invest money and are encouraged to bring in more people under you. In reality, there’s no real investment happening—just a cycle of money moving from new users to older ones.
Red flags:
- “Guaranteed” returns.
- Heavy focus on referrals.
- No real product or technology behind the project.
3. Fake Influencers and Giveaways
Scammers create fake profiles of celebrities or crypto experts and run ads offering investment plans and offer “giveaways” that require you to send crypto first. Many people trust these endorsements, giveaways and end up sending money to scammers.
Stay away from:
- Profiles that look real but have minor differences in usernames.
- Messages saying “Send 0.1 BTC to receive 0.2 BTC.”
- Suspicious YouTube livestreams promoting giveaways.
4. Phishing Attacks & Fake Airdrops
In phishing scams, scammers pretend to be from real crypto exchanges or wallet services to fool people into giving away their login details. They usually send fake emails, text messages, or social media messages that look official. If you click on these links and enter your information, the scammers can get into your account and steal your crypto.
Stay alert if:
- You’re asked to connect your wallet to claim free tokens.
- The site mimics a trusted platform but has a different URL.
- You’re asked for your seed phrase or private key.
Real Cases in India
India has seen several major crypto scams in recent years:
Fake Mining Firms in Gujarat
Several fake companies in Gujarat claimed to run large-scale Bitcoin mining operations. They promised investors high and guaranteed returns by saying the money would be used to “mine” Bitcoin—a process that requires powerful computers and consumes a lot of electricity.
The catch? These mining operations never existed. The companies just collected money from people and, after some time, shut down their offices, disappeared, and left investors with nothing. It was a classic case of fraud masked as a technical opportunity.
Lesson: Always check if a company is legally registered, has a physical office, and if its business model actually makes sense. If they promise high profits with no risks, it’s likely a scam.
Telegram Pump & Dump Groups
On platforms like Telegram, many private or public groups claim they can help you get rich quickly by sharing “secret tips” about unknown or low-priced coins. What actually happens is a “Pump and Dump” scam. The group admins buy a cheap coin in advance, then hype it up in the group and convince others to buy it. As more people buy, the price rises (“pump”). Then the scammers sell their coins at the top, making a profit—while everyone else is left holding worthless tokens as the price crashes (“dump”).
Lesson: Don’t blindly trust tips from Telegram, WhatsApp, or social media. These groups are often just looking to profit at your expense.
How to Protect Yourself from Crypto Scams
Only download apps from official platforms: Although fake apps can end up in the Google Play Store or Apple App Store, it is safer to download apps from these platforms than elsewhere.
Avoid “Get Rich Quick” Schemes:
Any project promising “double your money in a week” is a red flag. Legitimate investments take time and come with risk.
Use Only Reputable Exchanges:
Stick to trusted platforms like CoinDCX, CoinSwitch, WazirX, or Binance. Always double-check URLs before logging in or transacting.
Be Careful with Social Media Promotions:
Don’t trust any crypto opportunity just because it’s being promoted by a big name or appears on social media. Always verify if the celebrity endorsement is real. Check if the page or account is verified (blue tick), and look at their past activity.
Do Your Own Research (DYOR)
Before investing in any project, read the whitepaper, check the team’s background, and look for audits or reviews. Don’t invest just because of hype or influencer recommendations.
Expert Advice
Ritesh Bhatia, a leading cybersecurity consultant and founder of V4WEB Cybersecurity, shares this crucial insight:
“In the world of cryptocurrency, your biggest defense is awareness. Scammers no longer wait for you to make a mistake—they actively create traps using fake apps, deepfake videos, and social engineering. If someone is promising guaranteed returns, instant profits, or pressuring you to act fast, it’s almost always a scam. Trust verified sources only, and never share your private keys or seed phrases with anyone, no matter what the reason is.”
What to do if you fall victim to a crypto scam
Notify Your Bank or UPI App Immediately
Contact your bank or payment app (Paytm, PhonePe, etc.) if money was transferred.
- They may be able to trace or block the transaction.
Inform Your Crypto Exchange
- Contact customer support of the exchange (e.g., WazirX, CoinDCX, Binance).
- Share wallet addresses, transaction IDs, screenshots, and timestamps.
- Ask them to investigate or freeze suspicious accounts if possible.
Report the Scam
- File a complaint on the Cyber Crime Portal: https://cybercrime.gov.in
- Visit your local police station and file an FIR with all evidence.
- Inform RBI or SEBI if financial regulations were involved.